MSMEs face operational crisis as LPG shortage threatens jobs, growth

AIE National Chairman K E Raghunathan said for thousands of small industries, commercial kitchens, and food processors, "LPG is not just fuel, it is the lifeline of daily production"

A critical shortage of LPG is pushing micro, small and medium enterprises towards an operational crisis, the Association of Indian Entrepreneurs said, calling for urgent intervention of central and state governments to prevent job losses in the sector.

Association of Indian Entrepreneurs National Chairman K E Raghunathan highlighted that for thousands of small industries, commercial kitchens, and food processors, "LPG is not just a fuel, it is a lifeline of daily production."  In a statement on Sunday, he said, "When supply becomes uncertain and prices rise sharply, MSMEs simply cannot absorb the shock."  "Unlike large corporations, MSMEs operate on extremely thin margins. A sudden spike in energy costs or irregular LPG supply can force many units to cut production, reduce workforce, or temporarily shut down operations. If this situation continues, it could trigger a chain reaction impacting employment, supply chains and local economies," he added.

 

Raghunathan urged the central and state governments to implement the following corrective measures before the situation becomes unmanageable.

To direct LPG supplies to MSMEs and essential industries to prevent disruption of production, temporarily reduce excise duty and VAT on petroleum fuels used by MSMEs.

According to him, there has to be strict monitoring to prevent hoarding and black marketing of commercial LPG cylinders.

On March 14, the Tamil Nadu government announced a subsidy of Rs 2 per unit of electricity for restaurants, hotels, and tea shops that switch to electric stoves instead of commercial LPG cylinders to run their businesses.

With 60,698 factories operating in the State after obtaining the consent from the State Pollution Control board, Additional Chief Secretary Radhakrishnan said, henceforth these factories do not require additional certificates from the Pollution Control Board to run their business for using alternative fuels like kerosene.